Twilio Offers Early Shareholders Liquidity In Repurchase Offer

Twilio, the startup that lets developers integrate voice, text and other communications services into mobile and web apps by way of a set of APIs, has stayed mum in answer to questions of when it might finally make the leap to go public.

But today it took a step that some believe could help position it for just that: the company has sent out a letter offering to repurchase Series A Preferred Stock and Series B Preferred Stock. The price offered per share is $10.179, with a maximum buyback of $30 million.

SecondMarket is executing the repurchase offer, which will expire on August 11, according to documents obtained by TechCrunch from two sources. Twilio declined to comment.

According to a report in May, when the company last sold equity to outside investors during a $100 million fundraise, the per-share issue price was $11.31, a premium to what the company is currently offering existing shareholders. That round gave Twilio a post-money valuation of $1.1 billion.

According to a document provided by VCExperts, Twilio has issued 13,173,240 Series A Preferred shares, and 11,416,062 Series B Preferred shares.

While share repurchases for early employees are not uncommon among older startups, what’s also interesting here is the insight on some of the company’s financials.

In February of this year, Twilio noted that it was adding $1 million in recurring revenue every seven days, having ended 2014 with a revenue run rate of $100 million. But like many quickly growing cloud startups, Twilio loses money.

In the first half of 2015, the company booked $71.74 million in sales, with cost of revenue of $32.32 million. Those figures leave a gross profit of $39.42 million for the period. Deducting operating expenses and other costs, Twilio had a net loss of $16.370 million in the first six months of 2015.

Yet over the past few years, Twilio has garnered slowly improving margins. The company had revenues of $49.92 million in the year to December 31, 2013; with those revenues growing to $88.85 million in 2014. The company had gross profit of $24.05 million in 2013, and $47.42 million in 2014. That leaves the company with gross margins of 48.17 percent in 2013, 53.37 percent in 2014, and 54.93 percent in the first half of 2015.

As of June 30, 2015, Twilio had $121.82 million in cash and cash equivalents.

The company has raised $203.7 million in VC funding from investors that include Redpoint, DFJ, Bessemer, Founders Fund, Union Square Ventures and others.

Post updated with the maximum buyback total, removing analysis of the potential size of the transaction based on the aggregate A and B shares that exist.